Microsoft vs. Linux

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We underdogs tend to stick together. We don't use Windows if we can
help it. We avoid Internet Explorer like the plague (an apt metaphor).
We are a minority in a world dominated by Windows (93% of the
installed base worldwide, according to HitsLink Market Share statistics
for August 2009) and IE
(67%).

Mac users belong to the largest OS minority at 4.9% (5.3% if we
include iPhone and iPod touch users, as both run a version of
OS X), followed by Linux at 0.94%. Firefox is the most popular
non-Microsoft browser at 23%, followed by Safari at 4.1%. Google's
up-and-coming Chrome browser has achieved 2.8% market share, and
perennial underdog Opera is just over 2.0%.*

Microsoft must perceive Linux as its greatest threat. Why else
target Linux when Windows has 99 times as many users?

The Linux Strategy

Linus Torvalds started Linux by creating his own Unix-like kernel in
1991. Torvalds eventually released Linux under a GNU license, which
allowed for both free and commercial distribution of the open source
operating system. Linux has become very popular on servers, but it has
only a small presence in personal computing.

The Linux strategy is to make the operating system free, open, and
customizable. Programmers are free to modify their installations to
best meet their needs.

The problem with the Linux strategy is that it's free, open, and
customizable. There are numerous Linux distributions, many of them
offering two or three user interface options - GNOME, KDE, or Xfce. All
distributions share the Linux name, and as a free, open source
operating system, there's little incentive to market Linux.

The Mozilla Strategy

Microsoft killed of the Netscape browser and Netscape itself by
first giving away Internet Explorer for free and later incorporating it
into the Windows operating system. IE was even available for Macs,
although Microsoft stopped development after Apple released Safari. IE
has never been available for Linux.

Netscape was reborn as Mozilla - free, open, and customizable
browser. It's available on numerous platforms, and it's 24 times as
popular as Linux. Why? Because Firefox was able to capitalize on the
security flaws of the Windows/Internet Explorer platform - and because
Mozilla.org was able to monetize the search box. You can give some
things away and make some money at the same time.

The Apple Strategy

From the first
Macintosh in 1984 until the release of System 7.1 in August 1992, the Mac OS was
free. Your Mac came with whatever version was current at the time, and
you could go to your local Apple dealer, buy a box of blank floppies,
and copy the System 6 or System 7 disks for your own use. The operating
system was a tool for selling the hardware, so Apple didn't need to
charge for the OS, and Apple has never locked the Mac OS to a specific
piece of hardware or with an authorization code.

Apple has always used free software as an incentive to buy Macs. At
first, it was MacWrite and
MacPaint that came bundled with the
Mac. Later, HyperCard. Still later,
Cyberdog, Apple's
first Internet suite (browser, email client, news reader, address book,
and FTP). For quite a while, Apple bundled ClarisWorks with consumer
Macs, an integrated software suite that put Microsoft Works to shame
and was included in education Macs everywhere. ClarisWorks was even
moderately successful on Windows.

And then there was iTunes, which began life as an app to rip your
CDs, manage your music library, synchronize that with your iPod, and
burn your own mix CDs. iTunes was originally Mac only and helped sell
iPods. As the iPod market mushroomed, iTunes became very popular on
Windows as well, and today iTunes works with audio books, videos,
iPhones, and Apple TV. And it provides access to an online store where
you can buy music, audio books, and videos. It may no longer sell Macs,
but it does sell iPods and media.

Gene Steinberg
recently noted on Tech Night Owl that a big part of Apple's
strategy is keeping the overall cost of ownership down by keeping apps
affordable. In addition to the programs that come bundled with new Macs
and the Mac OS, Apple sells iLife and iWork at very reasonable
prices.

Apple and Microsoft

Apple and Microsoft have always had an interesting relationship. On
one hand, they are competitors in the operating system market, where
Windows overshadows the Mac OS (according to HitsLink, Windows users
outnumber Mac users about 19:1). And in the media player market, where
the iPod completely blows away what remains of the Zune line (one
model).

Although Microsoft doesn't support the Zune on non-Windows operating
systems and long ago discontinued Internet Explorer for the Mac, there
is one place where Microsoft specifically targets the Mac audience:
Microsoft Office:
Mac. The Mac Business Unit essentially has two products, the free
Microsoft Messenger instant messaging client and Office for Mac, which
is a profit center for Microsoft. The business edition of Office: Mac
sells for $380 at Amazon.com, while the home and student edition is a
far more affordable $108.

The Microsoft Way

What's interesting is that the software for the two editions is
exactly the same. The difference is the end user license: Business
users can buy upgrades when a new version of Office ships; those with
the home and student edition are not eligible for upgrades. Also, while
they're allowed to install Office on up to three Macs, they are not
allowed to transfer the program to another user under any
circumstance.

Although it sells keyboard, mice, and media players, Microsoft is
essentially a software company. It completely dominates the operating
system market. It's browser is the world's most popular. It's office
suite is probably the most popular in the world as well. Last year, we
published an article showing how Microsoft Word and
Excel had risen to dominance on both Mac and Windows platforms - in
fact, by 1997 Excel had a higher share of the Mac market than the PC
market!

Whether Microsoft is selling an OEM license for Windows XP to a
netbook maker, the "Ultimate Edition" of Vista to a businessman, or a
companywide license for Office, it makes its money selling software. It
doesn't care whether you run Office on Windows or Mac, as long as you
pay for it.

The Big Difference

And there's the biggest difference between Apple and Microsoft.
Microsoft does everything in its power to prevent software piracy, even
to the point that its servers sometimes misidentify authorized
installations as pirated ones. Microsoft wants to squeeze every penny
it can from the market - and that's why that 1% market share for Linux,
from which Microsoft makes no profit, galls Microsoft.

Apple going Intel and offering Boot Camp for free is just one more
way Microsoft can profit from the Mac market.

Apple sells computers with an operating system and some free apps
installed. The bulk of its profits come from hardware sales, not
software or digital media. And without some clever hacking, Mac
OS X only installs on Apple branded computers, so it doesn't have
to worry about authentication schemes. You have a Mac, you have a
software license, and there is no obstacle to using them together
(hardware requirements permitting).

Microsoft and Linux

Microsoft is scared of Linux because it sees the free operating
system as a threat rather than an opportunity. The company reasons that
if people are using a free OS and have access to free office suites and
other apps, they won't buy commercial software.

Nonsense. Linux is one percent of the market that Microsoft could
target with Office: Linux. Just because people choose an alternate OS,
as Mac users do, doesn't mean they won't choose the world's most
popular office suite, as Mac users also do.

Apple and Linux

While Windows is 99 times as popular as Linux, Mac OS X is only
about five times as popular. Put another way, while supporting Linux
users might add 1% to Microsoft's bottom line, it could increase
Apple's software market by 20%. iTunes for Linux could be a profit
center, selling iPods and media, albeit a small profit center.

Just because people choose a free OS doesn't mean they won't pay for
apps or media.

Until Apple realizes that, it will ignore Linux. And until Microsoft
realizes that, it will see Linux as a threat rather than an
opportunity.

* Here at Low End Mac, our August 2009 logs show
Safari and Firefox in a dead heat at 37.8% of visitors, and Linux at
2.9%. IE is at 18.3%, and less than 40% of LEM visitors are running
Windows.

Dan Knight has been using Macs since 1986,
sold Macs for several years, supported them for many more years, and
has been publishing Low End Mac since April 1997. If you find Dan's articles helpful, please consider making a donation to his tip jar.